Q3 2021 Revance Therapeutics Inc Earnings Call
Okay.
Welcome to <unk> Therapeutics third quarter 2021 financial results and corporate update conference call. At this time all participants are in a listen only mode. Following management's prepared remarks, we will hold a Q&A session.
To ensure that we have ample time to address everyones questions. During the Q&A session. We would ask for a limit of one question and one follow up question per person.
To ask a question at that time. Please press star followed by one on your Touchtone phone.
If anyone has difficulty hearing the conference call. Please press star zero for operator assistance.
Sorry, Winder. This call is being recorded today ninth of November 2021, I would now like to turn the conference call over to Jessica Sierra head of Investor Relations and ESG of revenge. Please go ahead.
Thank you Laurie joining us on the call today from rebounds, our Chief Executive Officer, Mark Foley, President and Chief Financial Officer, Michelle Qi Senior Vice President of clinical development from its IPO.
During this conference call management will make forward looking statements, including statements related to the potential approval and timing of approval, that's actually botulinum toxin injections at the Bolivar mine and therapeutic indications our ability to remediate deficiencies identified by the FDA regarding our BLA a type a meeting with an S T.
Financial performance revenue and processing volume runway.
Financial performance and guidance expected cash runway, our strategic priorities and cash preservation.
Our market.
If I have any opportunity of the market demand for our products and services the safety efficacy and duration of taxi botulinum toxin for injection.
<unk> commercial success and growth.
Our products and services.
Potential benefits of our drug product candidates and technologies and clinical development of our product candidates our business strategy planned operation commercialization plans and thus that extra therapeutics industry. These forward looking statements are based on the company's current expectations and inherently involve significant risks.
Our actual results and the timing of events could differ materially from those anticipated in such forward looking statements as a result of these risks and uncertainties.
Also on today's call, we will present, both GAAP and non-GAAP financial measures.
A reconciliation of non-GAAP to GAAP measures is included in our earnings release.
With that I will turn the call over to Mark Foley Mark.
Thank you Jessica and good afternoon, everyone and thanks for joining our third quarter of 2021 financial results Conference call.
Before we cover our performance for the third quarter and review the positive results from our phase III Aspen OLS study for cervical dystonia I'd like to provide an update on our BLA for <unk> botulinum toxin a projection about their bonds.
Most of you are aware we received from the FDA on October 15.
<unk> to approve our application in its present form due to inefficiencies related to the onsite inspection of our manufacturing facility.
We're obviously very disappointed by the Fda's response and also understand.
Could you delay of our BLA, that's been frustrating for all of our stakeholders. However, I can assure you that the entire against teams as determined as ever to get our neuromodulator product group as soon as possible.
Currently working on preparing the briefing book for a type a meeting request to gain clarity and alignment on the requirements needed for approval and are incorporating the additional information that was provided by the FDA following our CRM, including our establishment spectral CT to inform our submission.
Given where we are in this process and our pending engagement with the agency. It is inappropriate for us to comment beyond what we've already communicated until we have our type a meeting.
Forward to providing an update once we have confirmation on our pathway to approval.
This is not the first time, we've experienced the launch delay.
Call of last year, the commercial rollout of <unk> was pushed back five months due to COVID-19 induced supply chain constraints from our partner geography NSA. Despite.
Despite the delay in working under the limited parameters of the pandemic, we safely on boarded over 100 sales reps train injectors and delivered a very successful launch that generated $58 million in its first 12 months and a revenue run rate of over $70 million as of Q3 2021.
Looking back I'm proud of the tremendous progress we've made as an organization over the past two years first and foremost in aesthetics, we submitted our BLA for our lead product taxi botulinum toxin a projection for all of our lives. We also successfully completed a phase II program for our drug product upper facial lines secured the exclusive distribute.
For <unk>, our <unk> line of fillers in the U S acquired NMD and launched Opel and built out a strong commercial infrastructure.
And therapeutics, we validated the opportunity for a long acting neuromodulator treating muscle movement disorders with the successful completion of our phase III program in the treatment of cervical dystonia and our phase II clinical trial for upper limb spasticity.
Collectively the muscle movement disorder market opportunity currently stands at $1 2 billion worldwide and about 78% of that opportunity in the U S.
<unk> of our Aspen program for <unk> in April.
Projection in cervical dystonia.
Company's second successfully executed phase III program supporting the differentiated performance profile of our neuromodulator across our trials in aesthetics and therapeutics.
All of these milestones that position us to create meaningful value within our aesthetics and therapeutic franchises.
To put it simply the opportunity for a long acting neuromodulator remains strong and continues to be an unmet need for patients and consumers.
We continue to leave and improve the ability of our product and based on the CRA. All the deficiencies cited were limited to observations major in the agencies onsite inspection of our manufacturing facility.
In other words, the Crlf dot related to our clinical data package or a product anticipated label.
That said I would like to outline our strategic priorities going forward, while also announcing some related organizational changes.
Our number one strategic priority is to obtain FDA approval for botulinum toxin a protection for both our lives as soon as possible.
Number two is to continue to increase our revenue and the $1 2 billion U S dermal filler market with our 8-K collection.
And number three is to expand and cultivate deep and lasting customer relationships through <unk>, our fintech platform.
In addition to aligning our capital allocation strategy with these priorities, we will also be preserving cash to enhance our financial flexibility.
And Toby will cover more on specific terms of our priorities later on the call.
In line with our strategic initiatives and in order to optimize our structure performance I'm pleased to announce the promotion of adjustments as our chief commercial.
Marshall Officer President of rebates.
This change allows me to streamline my reports as I assume direct and personal oversight of all aspects of our BLA Pradaxa botulinum toxin a for injection.
Further this change positions the organization to better align resources.
<unk> capital allocation efforts and enhanced performance.
His promotion to president and reflect the strong performance and the confidence we have in this leadership.
He was instrumental in developing revamped this commercial strategy integrating handy.
Being an exceptional team and successfully commercializing our portfolio has experienced the backdrop will continue to be invaluable to our organization.
With that I'll turn the call over to Jeff who will cover our performance for the quarter.
Thank you Mark first let me say by saying an honor to serve as president of Romance Echo Mark's comments, we've come a long way over the past few years and laying the foundation for growth and none of that was impossible without our teams.
My years, overseeing commercial operations interfacing with departments across the organization I continue to believe that we have the right vision strategy and people in place to realize our potential across both aesthetics and therapeutics.
The market demand for long lasting neuromodulator remains robust and this is supported by recent clinical program initiated by our peers to attempt to show extended duration higher doses of their existing Neuromodulators formulations.
Our formulation is new and uniquely different from what's available on the market today, it's the only neuromodulator product with their proprietary peptide formulation with clinical data data demonstrating a long duration profile in addition to safety and efficacy.
There is a current studies a 40 unit dose of taxi botulinum toxin a per injection showed a median duration of effect of six months and up to nine months for certain patients.
Further our strong clinical data for a set of indications in Gabon line forehead mine lateral canthal lines and upper facial lines as well as therapeutic indications in cervical dystonia upper limb spasticity have all consistently demonstrated long duration profile for these reasons, we believe taxi botulinum toxin a projection.
The most differentiated potential neuromodulators formulations to date.
Turning to our results total revenue for the third quarter was $18 3 million.
Seven 4% increase over Q2, despite a slower period.
Growth was driven by higher sales from existing accounts as well as the addition of new accounts.
During the quarter, we added over 500 count across <unk>, and our Fintech platform, bringing our total aesthetic accounts to over 2500.
Looking ahead and given the continued strength of the overall market, we expect a seasonally strong Q4 heading into the holiday season.
This is commercial launch one year ago. The <unk> collection is proving to be a valuable and differentiated product line.
It's the most natural at least modified hyaluronic acid dermal filler on the market today and we're pleased with the trend the traction we have built thus far.
Our commercial team is focused on expanding our prestige customer base for our inkjet, which in turn will serve directly as the commercial foundation protective botulinum toxin a for injection once approved.
We believe that we can realize significant cross selling opportunities operating leverage with our civic franchise overtime.
The first relational commerce platform for the aesthetics vertical as another exciting piece to our portfolio.
Long believed that the best way to retain and attract customers is to be there to partner to help them build a better practice and stronger consumer loyalty.
It puts us develop a fintech platform that can not only complement our product offerings, but also support practice growth.
<unk> Leverages data from its transaction to help owners stood a better relationship with their customers.
As a first of its kind technology platform that we believe has the ability to transform patient and physician experience.
In addition to helping us create deep and lasting customer relationships.
Provides us with the opportunity to participate in the $68 billion U S. Fedex payment processing market and now as a registered payback platform can capture more of the credit card processing value chain.
Overtime. We believe this can represent a substantial revenue opportunity north of $500 million.
During the third quarter maintained a payment processing volume run rate of over half a billion.
Despite a traditionally slower season looking.
Looking ahead, we believe will have a significant runway for growth. We are very focused on account penetration building new features and completing customer migration MD Globo.
Turning to therapeutics I'd like to share the positive top line results from our phase III asset OLED study for cervical dystonia.
As a reminder, our phase II program consists of two trials you asked and one in the Africa LLS or open label safety study.
As one of the pivotal study evaluating the efficacy of Baxter botulinum toxin a for injection for the treatment of cervical dystonia and was successfully completed in October of 2020.
Aspen LLS was an open label multi center trial to evaluate the long term safety of repeat treatments that could botulinum toxin for injection in adults with cervical dystonia.
Enrolled a total of 357 subjects of which approximately 90% rollover from the anthem one study.
So thats could receive up to four treatments over 52 week period and the doses evaluated included 125, $202 50, and 300 units.
We are pleased to report the study demonstrated that could botulinum toxin a for injection was found to be generally safe and well tolerated as well as effective across all doses with repeat treatment.
The most common treatment related adverse events on a per treatment basis for muscular weakness at four 9%.
Asia at four 2% and injection site pain at two 7%.
No serious treatment related adverse events or dose dependent increases in adverse events.
We're pleased to see that the efficacy data in the App and all of that is consistent with the efficacy result, and duration profile observed in the App in one study.
As with all that said the median duration of effect as defined as defined by the time to reach target Twister score right.
From $19 nine weeks 26 weeks across doses within the Evaluable treatment cycles comparatively medium duration of effect observed in the App and one study for 'twenty to 'twenty four weeks for 250 units and 125 million.
Given the safety efficacy and long duration profile, we continue to believe that the botulinum toxin a for injection can be promising can be a promising new treatment option for adults with this condition.
In particular, we believe the compelling dose ranging data from the study to help physicians optimize treatment plans for patients.
Firstly since the dosing strategy and treatment of effect can vary with each patient.
Absent III clinical program is our second successfully completed phase III program production botulinum toxin a for injection across two different treatment category.
We will assess the best way to advance our opportunity in cervical dystonia upper limb spasticity following clarity from the FDA on the approval path of our BLA for <unk>.
With that I'll turn the call over to Toby to cover our third quarter financials.
Total revenue was $19 7 million.
Third quarter, which included $18 $3 million from our <unk> collection.
$1 1 million from our partnership with VA trips on the Biosimilar to Botox and zero point $3 million from our Fintech platform.
Turning to our operating expense.
Selling general and administrative expenses for the third quarter were $52 8 million.
This primarily included sales and marketing expenses related to our HSA and pre commercial activities for taxi botulinum toxin made for injection.
SG&A expenses included depreciation amortization and stock based compensation.
Excluding these expenses non-GAAP SG&A expenses were $45 $1 million.
Research and development expenses were $30 1 million for the third quarter, reflecting costs related to clinical trials regulatory support for ongoing BLA.
Commercial manufacturing and quality activities and Fintech platform development.
R&D expenses include depreciation and amortization and stock based compensation. Excluding these expenses non-GAAP R&D expenses were $25 7 million.
Cash cash equivalents and short term investments as of September 32021 for $273 7 million.
Revamped the shares of common stock outstanding as of October 28, 2021 were approximately $71 8 million was $76 8 million fully diluted shares excluding the impact of convertible debt.
Now I'd like to review, our capital allocation priorities and the prudent measures we are taking to extend our cash runway.
As Mark and Dustin mentioned, our investments at this time, we are focused on obtaining FDA approval protects your box your lineup talk today for injection.
Driving greater adoption of our AJ and expanding and deepening our customer relationships drove overall.
We believe this will maintain our strong commercial momentum and enhanced our financial flexibility.
The proactive steps we are taking to preserve cash include but are not limited to.
Often non critical hires.
Bringing phase III clinical program for upper limb spasticity as well as other therapeutic pipeline activities and pausing the international regulatory and commercial investments redacted botulinum toxin for injection with the exception of our collaboration with both of them in China.
Due to the CRA all we received from the FDA. We are withdrawing our previously stated cash guidance of cash into 2024.
<unk> assumed FDA approval of <unk> botulinum toxin for injection in 2021.
Following our type a meeting with the agency and upon gaining clarity on our approval pathway. We plan to provide an updated cash guidance and our 2022, GAAP and non-GAAP operating expense guidance.
I'd like to emphasize that while our measures to preserve cash are important. We also expect them to be temporary and we remain committed to building our business long term and particularly our therapeutics franchise given the strong clinical data we have accumulated underscoring the differentiated.
Mark J. Foley: In addition to aligning our capital allocation strategy with these priorities, we will also be preserving cash to enhance our financial flexibility. Dustin and Toby will cover more on the specifics of our priorities later in the call. In line with our strategic initiatives and in order to optimize their structure for performance, I'm pleased to announce the promotion of Dustin Sjuts from Chief Commercial Officer to President of Revance. This change allows me to streamline my reports as I assume direct and personal oversight for all aspects of our BLA for doxybotulinum toxin A for injection. Further, this change positions the organization to better align resources, facilitate capital allocation efforts, and enhance performance. Justin's promotion to president reflects his strong performance and the confidence we have in his leadership.
Performance profile of taxi botulinum toxin for injection.
And with that I'll turn the call back over to Mark.
Thank you Tobey in closing we executed on our commercial strategy and delivered a strong Q3 in our base business. Despite the impact of seasonality.
We're also very pleased to advance our therapeutic potential to treat cervical dystonia completion of our phase III clinical program, representing a mark representing a market opportunity north of $300 million in the U S.
In the near term obtaining FDA approval is our top priority.
Mark J. Foley: He was instrumental in developing Revance's commercial strategy, integrating PINMD, building an exceptional team, and successfully commercializing our aesthetics portfolio. His experience and background will continue to be invaluable to our organization. With that, I will turn the call over to Dustin, who will cover our performance for the quarter.
As we speak we are preparing our briefing book for the type a meeting request and we'll provide an update once we have confirmation on our path forward with that I will now open the call up for questions operator.
Thank you and as a reminder to ask a question you will need to press star one on your telephone again that is star one.
Dustin S. Sjuts: Thank you, Mark. First, let me say that I'm honored to serve as president of Revance. I echo Mark's comments.
First question is from Ken Cacciatore of Cowen and company. Your line is open.
Hey, Mark and team a question around the CRM.
Dustin S. Sjuts: We've come a long way over the past two years in laying the foundation for growth, and none of that would have been possible without our team. In my years overseeing commercial operations, interfacing with departments across the organization, I continue to believe that we have the right vision, strategy, and people in place to realize our potential across both aesthetics and therapeutics. The market demand for a long-lasting neuromodulator remains robust, and this is supported by recent clinical programs initiated by our peers to attempt to show extended duration with higher doses of their existing neuromodulator formulation.
No. When you received that there was a little bit of lack of clarity.
Into all the different things that we're being asked for I know you know indicated you have the established inspection reports I'm wondering if that provided you any any more clarity.
As it provide any more comfort or discomfort.
After you've now seen that and then secondly can you just talk about the folks that <unk> been working with both internally and externally.
<unk> with you that have expertise here have you changed that at all or the folks you brought in or is it the same folks and you feel fairly comfortable with who is helping us navigate through the process. Thanks. So much.
Dustin S. Sjuts: Our formulation is new and uniquely different from what's available on the market today. It's the only neuromodulator product with a proprietary peptide formulation and clinical data demonstrating a long-duration profile in addition to safety and efficacy. In our Sakura studies, a 40-unit dose of Daxibotulinum toxin A for injection showed a median duration of effect of 6 months and up to 9 months for certain patients. Further, our strong clinical data for aesthetic indications in the belly lines, forehead lines, lateral canthal lines, and upper facial lines, as well as therapeutic indications in cervical dystonia, and upper lymphaticity have all consistently demonstrated a long-duration
Yeah. Thanks, Ken So first on the CRM as.
As we mentioned at the time that we received a CRM.
There was no clarity exactly on which of our responses to the 40 threes, we're going to be sufficient or not sufficient and we indicated at that time that prior to requesting a type a meeting we're hoping to gain additional clarity from the agency before filing the type a meeting request.
Currently as we commented on our prepared remarks that we have received established.
The DIR and additional feedback from the agency, which is going to guide.
Dustin S. Sjuts: For these reasons, we believe Daxibotulinum Toxin A for Ejection is the most differentiated potential neuromodulator formulation to date. Turning to our results, total RHA revenue for the third quarter was $18.3 million, a 7.4% increase over Q2 despite a slower period. Crows are driven by higher sales from existing accounts, as well as the addition of new accounts.
Sort of the submission of the type a meeting requests we continue to feel really good about the responses that we provided to the 43, but this will allow us to target more of those responses. So at this point, we're not going to get into sort of surmised anything worth getting into sort of a play by play with the agency we.
We do feel like the type a meeting is the point, where we plan to get more clarity from the agency and we will provide more context or color at that time.
Dustin S. Sjuts: During the quarter, we added over 500 counts across RHA and our FinTech platform, bringing our total aesthetic count to over 2,500. Looking ahead and given the continued strength in the overall market, we expect a seasonally strong Q4 heading into the holidays. Since its commercial launch one year ago, the RHA collection is proving to be a valuable and differentiated product line. It's the most natural and least modified hyaluronic acid dermal filler on the market today, and we're pleased with the traction we have built thus far.
On the consultant side of it.
We feel first off really good with the responses that we provided for the 480 threes. We were frankly surprised that we didn't have any communication from the agency along that journey and so receipt of the CRM.
In response to our 43 responses.
Disappointing and surprising given that however in the sort of the importance of getting our product out market as soon as possible. We certainly continue to leverage the external experts that we used along this.
Dustin S. Sjuts: Our commercial team is focused on expanding a prestige customer base for RHA, which in turn will serve directly as the commercial foundation for Daxiboxylinotoxin A for injection once approved. We believe that we can realize significant cross-selling opportunities and operating leverage with our aesthetic franchise over time. Opal, the first relational commerce platform for the aesthetic vertical, adds another exciting piece to our portfolio. We have long believed that the best way to retain and attract customers is to be their true partner, to help them build a better practice and stronger consumer loyalty.
Tire BLA journey and have sought out additional experts and advisers along the way to make sure that we are getting the benefit of the latest information that the best information that's out there and so on.
Again. This is number one priority, we're looking at sort of all different avenues to try and get our products onto the market as soon as possible.
With this additional information has allowed us to refine our type a meeting request.
Dustin S. Sjuts: They pushed us to develop a FinTech platform that can not only complement our product offering but also support practice growth. Opal leverages data from its transactions to help owners build a better relationship with their customers. It is a first-of-its-kind technology platform that we believe has the ability to transform the patient and physician experience, in addition to helping us create deep and lasting customer relationships. Opal provides us with the opportunity to participate in the $68 billion U.S. Aesthetics Payment Processing Market. And now, as a registered payback platform, platforms can capture more of the credit card processing value. Over time, we believe this can represent a substantial revenue opportunity north of $500 million.
Thanks, Mark Okay continued good luck in the process.
Thank you.
And our next question is from David <unk> of Piper Sandler Your line is open.
Hey, Thanks, So just a couple on the CRM.
The path forward here so.
FDA action was essentially delayed.
For almost a year.
Two the pandemic related constraints. So I wanted to ask you to the extent that you can answer this.
Assuming the agency is going to have to go back into the facility and do an inspection.
Dustin S. Sjuts: During the third quarter, we maintained a payment processing volume run rate of over half a billion dollars despite a traditionally slower season. Looking ahead, we believe Opal has a significant runway for growth. We'll be very focused on account penetration, building new features, and completing cuts for migration and hit MD to Opal. Turning to therapeutics, I'd like to share the positive top-line results from our Phase 3 Aspen OLEP study for cervical dystonia.
As the pandemic in any way factor into.
Your calculation regarding turnaround time, and how should we think about that and maybe do you have any sort of feedback from the FDA as to what their constraints right now since.
That has been a consideration in the past.
That's number one and then number two is with these kinds of processes.
Dustin S. Sjuts: As a reminder, our Phase C program consists of two trials, the ASPEN-1 and the ASPEN-OLS, or Open Label Safety Study. Aspen 1 was a pivotal study evaluating the efficacy of Daxibotulinum toxin A for injection for the treatment of cervical dystonia and was successfully completed in October of 2020. Aspen OLS was an open-label, multi-center trial to evaluate the long-term safety of repeat treatments of Zaxiboxyline-toxin A4 injections in adults with cervical dystonia. The study enrolled a total of 357 subjects, of which approximately 90% rolled over from the Aspen 1 study.
With consultants internal consultants extra nickel consultants et cetera.
Do you have a sense of what kind of spend.
You might need or additional spend if you will.
To get to a point where.
You have all your ducks in a row in terms of manufacturing and maybe you don't know the answer to that maybe that's close cut they meeting, but can you just help us understand.
Just call at least qualitatively what your thoughts are there. Thanks.
Sure. So first David on your question around the CRM and the path forward any impacts from the pandemic again, unless and I guess sort of the desire for clarity even internally.
Dustin S. Sjuts: Subjects could receive up to four treatments over a 52-week period, and the doses evaluated included 125, 200, 250, and 300 units. We are pleased to report that the study demonstrated daxibotulinum toxin A for injection was found to be generally safe and well-tolerated, as well as effective across all doses with repeat treatment. The most common treatment-related adverse events on a per-treatment basis were muscular weakness at 4.9%, Thephasia at 4.2%, and injection site pain at 2.7%. There were no serious treatment-related adverse events or dose-dependent increases in adverse events.
We're trying to make sure that we're being as transparent as we can I think given where we are we want to make sure that when we do communicate communicate with certainty and clarity and so right now would be speculating further as to whether or not for the pandemic related issues in terms of timing again, we believe that the best way to get clarity on this through.
A type a meeting obviously the sooner we can get that clarity better and once we get that I think we'll be able to lay up with a lot more certainty exactly what the path forward is going to be and what it's going to take.
On the consulting side of it in terms of spend and manufacturing and everything else, we talked earlier about sort of the priorities that we've laid out.
Dustin S. Sjuts: We are pleased to see that the efficacy data in the Aspen OLS study is consistent with the efficacy results and duration profile observed in the Aspen 1 study. In the Aspen OLS study, the median duration of effect as defined by the time to reach target twister score ranged from 19.9 weeks to 26 weeks across doses within the evaluable treatment cycle. Comparatively, the median duration of effect observed in the AFTRM-1 study was 20-24 weeks for 250 units and 125 units.
Getting approval, it's delivering on the <unk> revenue and continuing to drive adoption of the <unk> platform are being judicious with our span and so we believe we've got the right plan in place and will resource all of those appropriately to make sure that we continue to lose momentum and deliver on the key priorities for the company.
Okay. Thank you.
Thank you.
And our next question is from Seamus Fernandez of Guggenheim. Your line is open.
Alright, great. Thanks for the question so.
Dustin S. Sjuts: Given the safety, efficacy, and long-duration profile, we continue to believe that Daxiboxylinatoxin A for injection can be a promising new treatment option for adults with this condition. In particular, we believe that compelling dose-ranging data from the study can help physicians optimize treatment plans for patients, especially since the dosing strategy and treatment effect can vary with each patient. The Aspen III Clinical Program is our second successfully completed Phase III program for Dr. Vassalina Methoxam A for injection across two different treatment categories will assess the best way to advance our opportunity in cervical dystonia and upper limb spasticity, following clarity from the FDA on the approval path for VLA for Gabella 1. With that, I'll turn the call over to Toby to cover our third quarter financials. Thank you.
Just a couple of quick ones I'll move beyond the CLO.
But wanted to just get a sense of.
How the trajectory for the <unk> pillars.
You feel is likely to continue into the fourth quarter and into next year. It sounds like there's high conviction that that continued growth will be there, but it was our understanding that dachsie.
We've also sort of.
Forward use.
Opportunity for some of your key positions. So is the goal next year to really broaden out the <unk> account.
Number substantially beyond sort of the 2500 or.
Is it really to increase the penetration of the existing practices I know that I'm sure you're going to increase penetration of the existing past practices as part of the standard but the question is does the pullback on spend.
Toby: Thanks, Dustin. Total revenue was $19.7 million for the third quarter, which included $18.3 million from our RHA collection, $1.1 million from our partnership with Beatrice on the biosimilar to Botox, and $0.3 million from our FinTech platform. Turning to our operating expenses, Selling, general, and administrative expenses for the third quarter were $52.8 million. This primarily included sales and marketing expenses related to RHA and pre-commercial activities for Daxibotulinum toxin A for injection. SG&A expenses included depreciation, amortization, and stock-based compensation. Excluding these expenses, non-GAAP SG&A expenses were $45.1 million.
Limit your ability to expand to new accounts in any way shape or form.
Second question.
Sure So maybe I'll jump in and maybe less dust and add a little context and color as well first off in terms of the trajectory. Let me start by saying, we're incredibly pleased with how well the launch has gone I mean.
In a short period of time.
Toby: Research and Development Expenses were $30.1 million for the third quarter, reflecting costs related to clinical trials, regulatory support for ongoing VLA, pre-commercial manufacturing and quality activities, and fintech platform development. R&D expenses also included depreciation and amortization and stock-based compensation. Excluding these expenses, non-GAAP R&D expenses were $25.7 million. Cash, cash equivalents, and short-term investments as of September 30, 2021 were $273.7 million. Revance's shares of Common Stock outstanding as of October 28, 2021, were approximately 71.8 million, with 76.8 million fully diluted shares, excluding the impact of convertible debt.
Well to dry.
Ongoing penetration there countering that a little bit is obviously, we know that having a neuromodulator in her bag will also help unlock opportunity and stomach al. So again Tailwinds. We've got focus we've got new accounts that we can know and then head with I think partnering it within neuromodulator, but we are heading into sort of a strong season.
Toby: Now I'd like to review our capital allocation priorities and the prudent measures we are taking to extend our CAHPS runway. As Mark and Dustin mentioned, our investments at this time are focused on obtaining FDA approval for Daxibotulinum toxin A for injection, driving greater adoption of RHA, and expanding and deepening our customer relationships through Opal. We believe this will maintain our strong commercial momentum and enhance our financial flexibility. The proactive steps we are taking to preserve cash include, but are not limited to, causing noncritical hires, acquiring a phase three clinical program for upper limb spasticity, as well as other therapeutic pipeliner, and pausing the International Regulatory and Commercial Investment for Daxibotulinum Toxin A for injection with the exception of our collaboration with Boson in China.
And I don't know if you want to add anything to that just a couple of things I think the strategy for rent aesthetics focus on the account and not on driving consumers oil he kind of beyond the agnostic or an account has really resonated that resonated. Both are H a if we get the list on that I would address it has been for spin questions as well, we feel very confident that we laid out those words.
Dziedzic priorities were able to make adjustments and resources to ensure that we're not choking that's been in the orange a online investing in those things that have the highest return very good growing market for the normal fillers and we think that will continue to be able to drive growth, while it'd be great to have to actually right now I feel like we can.
Utilize this time to focus on our HJ and the demand for back there I get countless calls or doctors already asking when it's coming when it's coming as you can imagine so we feel like we could use that momentum around the romantic aesthetic strategy was <unk> to get us started and grow new account as well as our penetration.
Toby: Due to the CRL we received from the FDA, we are withdrawing our previously stated cash guidance of cash into 2024, which assumed FDA approval of Daxibotulinum toxin A for injection in 2021. Following our Type A meeting with the agency and upon gaining clarity on our approval pathway, we plan to provide an updated cash guidance and our 2022 GAAP and non-GAAP operating expense guidance. I'd like to emphasize that while our measures to preserve cash are important.
Great and then just in terms of the the plane finally the C D.
I think we were anticipating this year.
How should we think about the C O L.
Factory discussion points and win you'll be able to provide us with a detailed update you know on the overall sort of finally strategy in 2023 will that come alongside the the <unk>.
Type a post type of meeting updates.
Or will that come you know, perhaps at a later point in time.
Toby: We also expect them to be temporary. We remain committed to building our business for the long term and, particularly, our therapeutics franchise, given the strong clinical data we have accumulated underscoring the differentiated performance profile of daxibotulinum toxin A for injection. And with that, I'll turn the call back over to Toby. Thank you.
So just to reset sort of what we communicated on C. D was to complete the program and 21 file an 22 approval and 23 and now that we've completed the overall phase three program. We are certainly in a position to be able to file F. R strategy. All along was to file this as a.
BLA supplement to the go about our lines approval. We continue to think that that's the most crude strategy and approach however, given the the linkage between the.
Mark J. Foley: In closing, we executed on our commercial strategy and delivered a strong Q3 in our base business, despite the impact of seasonality. We're also very pleased to advance our therapeutic potential to treat cervical dystonia with the completion of our Phase III Aspen Clinical Program, representing a market opportunity north of $300 million in the U.S. In the near term, obtaining FDA approval is our top priority. As we speak, we are preparing a briefing book for the type A meeting request and will provide an update once we have confirmation on our path forward.
<unk> filing in the approval of our lines indication I think the most appropriate time to give an update on that will get me after that I may need will have more clarity and disability.
Great and then just one final question any visibility on the actual timing or or kind of the regulatory timing of the type of meeting itself. It was our understanding that it would be <unk>.
<unk> take two weeks to to request and then 30 days post that to actually get the meeting, but you know what.
Operator: Thank you. And as a reminder, to ask a question, you will need to press Star 1 on your telephone. Again, that is Star 1. Our first question is from Ken Cacciatore of Cohen and Company. Your line is open.
We're hearing about uhm some delays at F. D. A a lotta backlog just wanted to see if there was any sort of a general clarity on that that that you might be able to provide just even the outside possibility that this could be kind of an end of Q1 meeting is is is something that we're getting question 20 investors.
Mark J. Foley: Hey Mark and team, a question about the CRL. I know when you received it, there was a little bit of a lack of clarity into all the different things that were being asked for. I know you have the established inspection report, so wondering if that provided you with any more clarity Transcripts provided by Transcription Outsourcing, LLC. Thanks, Ken.
Thanks.
Sure. He I'll go back to kind of cancer of the question again, what we'd indicated previously when we received the crlf given that there wasn't any specific crlf itself, we were hoping to get a little bit more clarity between now bye.
By the media request.
Binder that we put together so we think we got that clarity to guide that filing and then we know what the statutory timelines are typically is 14 days for them to review and make a decision on granting a type a medium or not and then I have scheduled within 30 day certainly with the pandemic I'm sure there are scenarios, where that could get pushed out.
Mark J. Foley: So first on the CRL, you know, as we mentioned at the time that we received the CRL, there was no clarity exactly on which of our responses to the 483s were going to be sufficient or not sufficient. And we indicated at that time that prior to requesting a type A meeting, we were hoping to gain additional clarity from the agency before filing the type A meeting request. Subsequently, as we commented in our prepared remarks, we have received the established EIR and additional feedback from the agency, which is going to guide, you know, sort of the submission of the type A meeting request.
We're hopeful that.
Stay on track and on target and again, our plan is to communicate.
Clarity once we once we got the type of Haiti.
Alright, thanks, guys.
X.
Question is kind of Amazon Sammy steeple. Your line is open.
Good afternoon, everyone. This is Nick rubino on for Annabel, Thanks for taking my questions and congratulations to Austin.
So you mentioned the double dosing regimens from competitors.
What did you see him in the marketplace in terms of trends towards practices. Utilizing this method did you see the economics around this regimen potentially infringing on taxis spell your problem and.
Mark J. Foley: We continue to feel really good about the responses that we provided to the 483, but this will allow us to target more of those responses. So at this point, we're not going to get into sort of surmising anything.
Mark J. Foley: We're getting into sort of a play-by-play with the agency. We do feel like the Type A meeting is the point where we plan to get more clarity from the agency, and we'll provide more context and color at that time. On the consultant side of it, you know, we feel, first off, really good about the responses that we provided to the 483s. We were frankly surprised that we didn't have any communication from the agency along that journey, and so receiving the CRL in response to our 483 responses was disappointing and surprising.
And then just a quick one did he end of phase two meeting change anything about how you were thinking about the juniper study going forward I know, it's kind of.
On the back burner for now, but just any thoughts around that meeting. Thank you.
First the first double dosing if anything I think we'd look at it as for further credentialing along acting modulator opportunity I think you know if you go back in time.
There was sort of a long narrative that you know.
You know there really wasn't a need an age didn't want it back pretty quickly now.
Coming to a point where people recognize that there is a real need in the market and I think that.
Mark J. Foley: Given that, however, and the, you know, sort of importance of getting our product on market as soon as possible, we certainly continue to leverage the external experts that we've used along this entire BLA journey and have sought out additional experts and advisors along the way to make sure that we are getting the benefit of, you know, the latest information and the best information that's out there. And so, you know, again, this is our number one priority.
It's reassuring to see competitors starting to talk about.
Category.
However.
Alex depend on the market for over 30 years and a lot of effort has been put into trying to characterize to prepare the thing in your place.
Valuating performance, so uhm until they're through phase III data out there that looks at it we continue to think that in the absence of a differentiated formulation, it's gonna be hard to match the.
Mark J. Foley: We're looking at sort of all different avenues to try and get our product onto the market as soon as possible. And again, with this additional information, it's allowed us to refine our type A meeting request. Thanks, Mark. Okay, continue. Good luck in the process.
Duration profile match for the safety and efficacy of our products. So we continue to feel like there's a huge opportunity on that you mentioned the economic certainly and you start getting into double dosing with professional short active Neuromodulators you do start to.
David A. Amsellem: Our next question is from David Amsellem of Piper Sandler. Your line is open.
Up against sort of what's the affordability of that and as we've talked to the path in terms of positioning we think that there is an ability for us to get a premium.
David A. Amsellem: Hey, thanks. So, just a couple on the CRL and the path forward here. So, you know, the FDA action was essentially delayed for, you know, almost a year due to pandemic-related constraints. So, I wanted to ask you, to the extent that you can answer this, you know, assuming the agency is going to have to go back into the facility and do an inspection, is the pandemic in any way factored into your calculation regarding turnaround time? And how should we think about that? And maybe you have any sort of feedback from the FDA as to what their constraints are right now since that has been a consideration in the past?
For our customers to to pay a premium and fast as to make more margin, but we think that the economics with our product.
Whereas with some of the higher dose.
A bit of a T E. On the end of May to you all have a program. We are very encouraged by the feedback I've received from the agency and then at the age of meeting. So we now have clarity around the phase III credit program that will be needed to move that forward and ultimately seek approval for that education.
As Toby mentioned is from our given sort of the need to prioritize.
The approval of the DLA.
<unk> sort of adoption of the Orange a line of filler products and getting opal out into the marketplace. We're gonna pause sort of the the phase III around but again. This is not a if it's the web and we will have to sort of redo of activities around our therapeutics pipeline.
Once we feel that we're in a position to do.
So, but again a very good and it takes two meeting with the agency and we began we've got the 30 that we're looking for on her face your program there.
Mark J. Foley: So, that's number one. Unknown Speaker, Unknown Attendee, Chris Shibutani, Mikaela Franceschina, Douglas Tsao, Uy Ear, Douglas Tsao, Uy Ear, Sure. So first, David, on your question.
Great. Thank you and just a quick clarification are you seeing at the the double dosing.
As far as actually being used in the market is are you seeing trends of that increasing like are more people doing that now versus before or is it more just you know it's.
It centering in clinical buzz as opposed to commercial use.
Mark J. Foley: And so right now, we'd be speculating further as to whether or not there would be pandemic-related issues in terms of timing. Again, we believe that the best way to get clarity on this is through a type A meeting. Obviously, the sooner we can get that clarity, the better. And once we get that, I think we'll be able to lay out with a lot more certainty exactly what the path forward is going to be and what it's going to take.
Mark J. Foley: Sure. So first, David, on your question around the CRL and the path forward and any impact from the pandemic, again, I, and listen, I get sort of the desire for clarity. And, you know, even internally, we're trying to make sure that we're being as transparent as we can. I think given where we are, what we want to make sure is that when we do communicate, we communicate with certainty and clarity.
This is often we actually haven't seen it really resonating. These are clinical trials a lot of these have been cheese upstate.
Something other than face for for the rigour of those is not necessarily the same as a phase III program stringent endpoint I think it's a novel concept that people are trying to do.
As it relates to kind of data generations practicality is I don't believe any manufacturers cut the price of half and they haven't done that the value for the practitioner to try to do that for a slightly increased duration profile is one that doesn't seem to residents and also I've never really been long term safety are increasingly neuromodulator.
Mark J. Foley: You know, on the consultant side of it, in terms of spend and manufacturing and everything else, you know, we talked earlier about sort of the priorities that we've laid out, you know, getting approval, it's delivering on the RHA revenue and continuing to drive adoption of the Opal platform while being judicious with our spend. And so, you know, we believe we've got the right plan in place, and we'll resource all of those appropriately to make sure that we continue to not lose momentum and deliver on those key priorities for the company.
Those things to try to drive.
Africa. So today, we have not seen that resonate outside of a few publications.
Perfect. Thank you very much.
Hey that question is spent a female D. One of me do who your line is open.
Great. Thanks, so much for taking my questions and and that details you provided so far so maybe one around the around Dec seen just in terms of the <unk> can you give any clarity around that specifically.
It was at some specified as a voluntary action indicated or official liason indicator or anything sort of more in terms of what you. What you saw there and then maybe just a couple of sort of quick kind of clarification from I guess for Toby just as you sort of thinking about your cash position and and some of the changes you're making can you just talk about how.
Seamus Christopher Fernandez: And our next question is from Seamus Fernandez of Guggenheim. Your line is open.
Seamus Christopher Fernandez: Oh, great. Thanks for the question. So just a couple of quick ones. I'll move beyond the CRL, but why don't you just get a sense of [inaudible] whether the goal next year is to really broaden out the RHA account number substantially beyond sort of the 2,500, or is it really to increase the penetration of the existing practices? I know that I'm sure you're going to increase the penetration of the existing practices as part of the standard, but the question is, does the pullback on spend limit your ability to expand to new accounts in any way, shape, or form? Now, I have a second question.
That impacts D. Beatrice collaboration in terms of spend there and then just in terms of sort of S. G. A R. D. 700, if you can provide any sort of run right that we should think about.
Birth, fourthquarter or maybe for the first couple of quarters of next year cause we update our model is just in terms of kind of how that might be impacted by these efforts you are making.
Q.
Hello, This is mark but the first one Toby hit your second question. So in terms of more clarity on the <unk>.
Totally understand the desire or work for.
But.
Okay. Thank you back we felt really good about the responses that we provided to the observations in the <unk>.
We believe that we've got that.
Additional information that we need to refine our request and we're not going to be commenting on.
Additional specifics until we get the Taipei meeting.
Mark J. Foley: Chris, maybe I'll jump in and maybe let Dustin add a little context and color as well. So, first off, in terms of the trajectory, let me start by saying we're incredibly pleased with how well the RHA launch has gone. I mean, you know, in a short period of time, we've validated the strategy, we've generated really good revenue growth, and I think it's a testament to the strategy and the execution of our first team that's out there and the quality of the RHA product line.
Agency to make sure that we've got some clarity on what's going to be vehicle report.
With regard to your question around the actress.
Then we continue to believe in that collaboration and partnership that we have we have a successful pilot to meeting that providing clarity on what is needed to conduct a successful clinical trials similar to botox. So we will continue to invest alongside Piedras recall of that.
Mark J. Foley: We're also still looking forward to getting RHA 1 approved, which we also think will help going forward. So a couple of macro things, the overall market dynamics continue to be really healthy. So, you know, consumers engaging in facial injectables, that continues to be a really robust market. We think Q4 seasonally tends to be stronger than Q3, so that's all good.
R&D collaborations fifty-fifty Cost-share dot <unk>.
And then your third question was on the Mitch Forequarter spend in sort of a projected run with grapes going forward for.
Mark J. Foley: And then if you look at sort of the headwinds and the tailwinds, on the tailwind side of it, you know, you've got ongoing focus on the RHA product line, which would have competed for a little bit of time with the launch of our neuromodulator. So we'll continue to drive that. As you mentioned, Seamus, the number of accounts we've talked about sort of going after the prestige category in the market, which is the top third, which is roughly, you know, 15,000 or so, which we said we kind of get into roughly half of those. So we're kind of 2,500 along that journey, adding roughly 500 accounts per quarter.
I think there'll be a little bit of puts and takes as we approached fourth quarter sort of where we are for the full year.
Just given that there are still be dissipated a little bit more capitalization.
The manufacturing cost for the inventory production of Dachsie, However that would be offset by left SG&A.
Sort of view the launch a parry launch for a doctor.
And then.
The cash for the preservation initiatives that we are how are we have underway to extend their cash runway.
Mark J. Foley: So we do think that there's still room to drive ongoing penetration there. Countering that a little bit is obviously, we know that having a neuromodulator in our bag will also help unlock opportunity in some accounts. So again, tailwinds, we've got focus, we've got new accounts that we can open, and then headwinds, you know, I think partnering it with the neuromodulator. But we are heading into sort of a strong season. And I don't know, Dustin, if you want to add anything to that.
Guide you to our Form 10-Q that we filed today were reassessed that operating planet when describing the prepared remarks again sort of our current financial resources and then there. We concluded we are fishing balance sheet resources to fund our operations for at least 12 months filing.
Form texture.
Dustin S. Sjuts: Just a couple of things. I think the strategy for a ramped aesthetics focus on the account and not on driving consumers' loyalty kind of beyond the agnostic of an account has really resonated. That resonates well with RHA. We get some lifts on that. I want to address the spin question as well. We feel very confident that when we laid out those strategic priorities, we were able to make adjustments and resources to ensure that we're not choking on the spin in the RHA line.
Okay. Thank you thanks.
Okay, Danny Kaye mind, taking a quick question you want me to transfer one on your telephone.
We have a question 10 P M on account of William Blair. Your line is open.
Alright, Thanks for taking my question.
Now that you've had already J.
Out there for a year alright, I know, we're all hoping for a relatively quick resolution with the agency around Darcy how.
Dustin S. Sjuts: Investing in those things that have the highest return; it's a very good growing market for dermal fillers, and we think that will continue to be able to drive growth. While it'd be great to have DAXC right now, we feel like we can utilize this time to focus on RHA, and the demand for DAXC is there. I get countless calls from doctors already asking when it's coming, when it's coming, as you can imagine. So we feel like we could use that momentum around the ramped aesthetic strategy with OBL and RHA to get us started and grow both new accounts as well as our penetration. Great. And then just...
How're you gain planning 2022, if he.
He is not on the market for the whole year and how should that street.
I'd like to see R. A J I guess also opal uhm sequentially grow throughout the next few quarters or is it.
To the extent, we're just waiting for Doctor <unk> that Halo effect that will come went back to you as a group.
Seamus Christopher Fernandez: Great. And then just in terms of the planned filing for CD that I think we were anticipating this year, you know, how should we think about the CRL, the manufacturing discussion points, and when will you be able to provide us with a detailed update on the overall sort of filing strategy in 2023? Will that come alongside the Type A, you know, the post-Type A meeting updates, or will that come, you know, perhaps at a later point in time?
And Tim so.
If you look at our commercial infrastructure and the people that we have a strategy.
There were supporting that brand, we feel like we need to drive adoption independent a back seat and if you look at sort of a successful at eight and the commentary made earlier about the back were still largely are pretty firmly penetrated into our target market. The fact that are keeping very focused on it practically.
Spect Rek wants us to come online here.
We continue to like our position in the market and the ability continue to drive penetration.
And the same with the oval too we just recently integrated the payback functionality in there, which will start to allow us to turn on additional features and so we continue to think that both of these can stand on their own.
Unknown Speaker: Unknown Speaker, the OLS Program in 21, file in 22, and approvals in 23. And now that we've completed the overall phase three program, we are certainly in a position to be able to file that. Our strategy all along was to file those as a VLA supplement to the Globeller Lines approval. We continue to think that that's the most prudent strategy and approach. However, given the linkage between the SVLA filing and the approval of our
It's obviously premature to speculate sort of what that runway and it looks like independent or neuromodulator and that's why I think once we have clarity from the agency around the Taipei and be in a better position to.
Sort of talk about what to eat with Iran. Primary looks like I don't know if you want to add anything on that I think he's still really good mark is continuing to grow we've been purposeful about building a standing value proposition for the unique characteristics of orange.
Seamus Christopher Fernandez: Great. And then there is just one final question.
Didn't see is coming out with pricing program coupon others that are artificially driving demand based off of prayer before choosing to buy our haa because the technology is different what they have their practice of today and our strategy for rent instead of different what they're getting from other manufacturers that doesn't change without that of course with one vaccine.
Unknown Speaker: Any visibility on the actual timing or kind of regulatory timing of the type A meeting itself? It was our understanding that it would probably take two weeks to request and then 30 days post that to actually get the meeting. But, you know, we're hearing about some delays at FDA, a lot of backlog. Just wanted to see if there was any, you know, sort of general clarity on that that you might be able to provide.
And we look forward to having it as quickly as possible we feel very good about the strength of already chain Opal agnostic could actually for.
That's great to hear and is there any update with your partnership, Wisconsin, I know that day so.
Unknown Speaker: Just even the outside possibility that this could be kind of an end-of-Q1 meeting is something that we're getting questions from investors on. Thanks. Sure, yeah, I'll go back to kind of Ken's early question again, you know, what we'd indicated previously when we received the CRL, given that there wasn't any.
Walk in the deal and you know obviously.
Two week.
Jerry: Jerry, I'll go back to kind of Ken's early question again, you know, what we'd indicated previously when we received the CRL, given that there weren't any specifics in the CRL itself, we were hoping to get a little bit more clarity, which we now have to sort of refine the meeting request, you know, binder that we put together. So we think we've got that clarity to guide that filing. And then, you know, we know what the statutory deadlines are.
Oh is there what what what kind of I guess, what the general status of the relationship and.
Is there you know are the room, you can triggers around share price.
You know it could be it could impact the relationship.
The upfront and sort of stock grant that we made was part of the overall distributions. We had much was a 10 year deal in the U S.
Ability to extend for two when your period a total of 12, there are minimum sitting there around sort of revenue.
Jerry: Typically, it's 14 days for them to review and make a decision on granting a type A meeting or not, and then that gets scheduled within 30 days. Certainly, with the pandemic, I'm sure there are scenarios where that could get pushed out. We're hopeful that that will stay on track and on target. And again, our plan is to communicate with clarity once we've had the type A meeting.
We've got a great partner.
We continue to feel really good about our performing in the marketplace. So.
If anything.
Given the Diana Neuromodulator were able to focus our resources and focus on building the brand, which over time, we think will benefit in terms of Ah a larger account based wants to be able to get on our modulator group, but not much.
Annabel Eva Samimy: Our next question is from Annabel Samimy of Stifel. Your line is open.
Nick Rubino: Good afternoon, everyone. This is Nick Rubino on behalf of Annabel.
Relationship continues to be really strong.
And.
Nothing related to the equity from.
Nick Rubino: Thanks for taking our questions and congratulations, Dustin. You mentioned the double dosing regimens from competitors. What have you seen in the marketplace in terms of trends towards practices utilizing this method? And do you see the economics around this regimen potentially infringing on DAX's value proposition? And then just a quick one, did the end of the Phase 2 meeting change anything about how you're thinking about the Juniper study going forward? I know it's kind of on the back burner for now, but any thoughts around that meeting? Thank you.
A relationship.
Okay, great to hear thank you for the question.
Thank you and there are no further questions at this time I will now turn the call over to my <unk> Chief Executive Officer for his closing remarks.
Thank you operator, and then coming on US we plan to virtually tennis people and Piper Sandler health care policies.
Your request for meetings with these super directly through us feel free to reach out to Jessica you'd like to schedule. Some time with that I would like to thank all of you for participating in today's call.
Unknown Speaker: There's the first time, you know, double dosing, you know, if anything, I think we look at it as sort of further credentialing of the long acting modulator opportunity. I think, you know, if you go back in time, there was sort of a long narrative that, you know, there really wasn't a need, and patients didn't want it. But I think pretty quickly now that we're coming to a point where people recognize that there's a real need in the market. And I think that, you know, it's reassuring to see competitors starting to talk about the long acting category.
And these conclude conferring to call. Thank you for participating give me nowadays.
Goodbye.
[music].
Unknown Speaker: However, you know, these products have been on the market for over 30 years, and a lot of effort has been put into trying to characterize different doses and different ways of evaluating performance. So, you know, until there's true phase three data out there that looks at it, we continue to think that in the absence of a differentiated formulation, it's going to be hard to match the duration profile of the product with the safety and efficacy of our product.
Unknown Speaker: So we continue to feel like there's a huge opportunity for that. As for the economics, certainly, as you start getting into double dosing with conventional short-acting neuromodulators, you do start to bump up against sort of, you know, what's the affordability of that.
Unknown Speaker: And as we've talked in the past, in terms of positioning, we think that there is an ability for us to get a premium and for customers to pay a premium, and for practices to make more margin. But we think that the economics with our product will work, whereas with some of the higher doses, I think that's a little bit of a TBD. At the end of phase two of the ULS program, we were very encouraged by the feedback that we received from the agency at that end of phase two meeting.
Unknown Speaker: So we now have clarity around the phase three program that will be needed to move that forward and to ultimately seek approval for that indication. As Toby mentioned in his remarks, given sort of the need to prioritize the approval of the DLA, the ongoing sort of adoption of the RHA line of filler products, and, you know, getting Opal out into the marketplace, we're going to pause the phase three program. But, you know, again, this is not an if; it's a when.
Unknown Speaker: And we will look to sort of resume activities around our therapeutics pipeline once we feel that we're in a position to do so. But again, a very good end of phase two meeting with the agency, and we feel again that we've got the clarity that we're looking for on our phase three program.
Unknown Speaker: Great, thank you. And just a quick clarification.
Nick Rubino: Are you seeing that via double dosing? As far as actually being used in the market, are you seeing trends of that increasing? Like, are more people doing that now versus before? Or is it more just, you know, it's generating clinical buzz as opposed to commercial use?
Dustin S. Sjuts: Hey Nick, this is Dustin. You know, we actually haven't seen this really responding. These aren't clinical trials. A lot of these have been IITs and obviously other Phase 4s. So the rigor of those is not necessarily the same as a Phase 3 program with stringent endpoints. I think it's a novel concept that people are trying to do as it relates to data generation.
Dustin S. Sjuts: The practicality is I don't believe any manufacturer has cut their price in half. If they haven't done that, the value for the practitioner to try to do that for a slightly increased duration profile is one that doesn't seem to resonate. And also, there's never really been long-term safety for increasing the neuromodulator doses to try to drive that efficacy. So today, no, we have not seen that happen outside of a few
Vemo Divan: And our next question is from Vemo Divan of Mizuho. Your line is open.
Vemo Divan: Can you just talk about how that impacts the Vietris collaboration in terms of spend there and then just in terms of sort of SG&A R&D. I don't know if you can provide any sort of run rate that we should think about for the fourth quarter or maybe for the first couple quarters of next year as we update our models, just in terms of kind of how that might be impacted by these efforts you're making. Thank you. Unknown Speaker.
Vemo Divan: Great, thanks so much for taking the questions and for the details you provided so far. So maybe one around DAXI and just in terms of the EIR, can you give any clarity around that specifically? You know, was it specified as a voluntary action indicated or an official action indicator or anything sort of more in terms of what you saw there? And then maybe just a couple of quick kind of clarifications from I guess for Toby just as you sort of think about your cash position and some of the changes you're making.
Mark J. Foley: Well, this is Mark. I'll hit the first one and let Toby answer your second question. So, you know, in terms of more clarity on the EIR, again, I completely understand the desire for, you know, more information, but, you know, we got to think it back to when we felt really good about the responses that we provided to the observations in the 4H3. We believe that, you know, we've got the additional information that we need to refine our type A meeting request, and we're not going to be commenting on, you know, additional specifics until we get the type A meeting with the agency to make sure that, again, we've got full clarity on what's going to be needed going forward.
Toby: With regard to your question around Viatris, again, we continue to believe in that collaboration and that partnership that we have. We had a successful type 2 meeting that provided clarity on what's needed to conduct a successful clinical trial for the biosimilar to Botox. So we will continue to invest alongside Viatris. Recall that that R&D collaboration is the 50-50 call share going forward. Then your third question was about the mix of fourth quarter spend and sort of projected runway rates going forward for OPEX.
[music].
Toby: I think there will be a little bit of puts and takes as we approach the fourth quarter, you know, on sort of where we are for the full year. Just given that there will still be a little bit more capitalization of sort of the manufacturing costs for the inventory production of DAXE. However, that will be offset by less SG&A on sort of the launch and the peri-launch for DAXE, if that makes sense. And then, you know, the cash preservation initiatives that we already have underway to extend our cash runway. Let me guide you to our Form 10-Q that we filed today.
Vemo Divan: Okay, thank you. Thanks.
Operator: And again, as a reminder, to ask a question, you will need to press star 1 on your telephone. We have a question from Tim Lugo of William Blair. Your line is open.
Timothy Francis Lugo: Thanks for taking the question. Now that you've had RHA.., out there for a year and I know we're all hoping for a relatively quick resolution with the agency around DACI but how are you game planning 2022 if DACI is not on the market for the whole year and how should the street kind of expect to see RHA and I guess also OPAL sequentially grow throughout the next few quarters or is it to the extent of we're just waiting for DACI and that halo effect that will come when DACI is approved?
Unknown Speaker: It's him. So, you know, first off on RHA, if you look at our commercial infrastructure, and the people that we have in place, the strategy, you know, the dollars that we're supporting that brand, we feel like we continue to drive adoption independent of vaccine. And if you look at sort of the success that we've had to date and the commentary we made earlier about the fact that we're still largely, or pretty thinly, penetrated into our target market, the fact that our team is very focused on it, the fact that we expect our RHA1 to come online here, you know, we continue to like how we're positioned in the market and the ability to continue to drive penetration. And the same with Opal too; we just recently, you know, integrated the payback functionality there, which will start to allow us to turn on additional features.
Unknown Speaker: And so we continue to think that, you know, both of these can stand on their own. But it's obviously premature to speculate sort of, you know, what that runway looks like, independent of our neuromodulator. And that's why I think once we have clarity from the agency around type A, we'll be in a better position, you know, to sort of talk about what the ramp of the growth runway looks like. I don't know, Dustin, if you want to add anything to that. I think you'd feel really good.
Dustin S. Sjuts: This market is continuing to grow. We've been purposeful about building a strong value proposition for the unique characteristics of RHA. You didn't see us coming out with pricing programs, coupons, and others that are artificially driving demand based on price. People are choosing to buy RHA because the technology is different than what they have in their practices today. And our strategy for aesthetics is different than what they're getting from other manufacturers.
Dustin S. Sjuts: That doesn't change without Daxi. Of course, we want Daxi, and we look forward to having that as quickly as possible. We feel very good about the strength of RHA and Opal as agnostic to Daxi pricing.
Timothy Francis Lugo: That's great to hear. And is there any update on your partnership with CAAHSA? And I know that they took stock in the deal. And, you know, obviously, the stock's been extremely weak since the CRL. Is there, you know, what kind of, I guess, what's the general status of the relationship, and is there, you know, are there any kind of triggers around share price that could impact the relationship?
Unknown Speaker: Get them to know the, you know, the
Unknown Speaker: Get them to know that, you know, the upfront sort of stock grant that we made was, you know, part of the overall distribution that we had, which was a 10 year deal in the U.S. with the ability to extend it for two one-year periods up to a total of 12. There are minimums in there around sort of revenue and spend, but they've been a great partner. We continue to feel really good about how we're performing in the marketplace.
Unknown Speaker: So, you know, given the delay in our neuromodulator, we're able to focus more resources and focus on building the brand, which over time we think will benefit us in terms of a larger account base once we ultimately get our neuromodulator approved. But now the relationship continues to be really strong, and, you know, there's nothing related to the equity, you know, from a relationship perspective.
Timothy Francis Lugo: Okay, great to hear from you. Thank you for the question.
Operator: Thank you. And there are no further questions at this time. I will now turn the call over back to Mark Foley, Chief Executive Officer, for his closing remarks.
Mark J. Foley: Thank you, operator. In the coming months, we plan to attend the Siebel and Piper Sandler Healthcare Conferences virtually. We welcome your requests for meetings if these events are directly through us. Feel free to reach out to Jessica if you'd like to schedule some time. With that, I would like to thank all of you for participating in today's call.
Operator: And this concludes today's conference call. Thank you for participating. You may now disconnect. Goodbye.
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